February 9, 1999

To:Audit Committee

From:City Auditor

Subject:Audit Projects Update

Recommendations:

It is recommended that this report be received for information.

Background:

At its meeting of November 3, 1999, the Audit Committee approved the work plan of the City Auditor. This work plan encompassed the period from September 30, 1998 to April 30, 1999. This document is a progress report on the projects identified in that workplan.

Comments:

The Workplan approved by the Audit Committee itemized 29 individual audit projects for the period September 30, 1998 to April 30, 1999. A status report on each of those projects is provided as follows:

1.Procedures relating to Sexual Assault Investigations

In 1998 City Council adopted the following motion:

"An audit be completed regarding the handling of sexual assault and family violence cases by the Police."

During the course of the audit a significant number of second level audit projects were identified. These include:

• Police Officers' Training
• Victim Support Services
• Sexual Assault Squad Mandate
• Effectiveness of VICLAS Computer Tracking System
• Comparison of Police Policies and Procedures with Actual Practices
• Institutional Police Attitudes Around Issues of Class, Occupation, Gender, Race, Sexual Orientation, Physical Appearance and their Impact on Investigations. Review of Occurrence reports. Quality of Documentation
• Interview of Victims, Victims Who Do Not Report
• Implementation of Recommendations of Various Reports, e.g. Campbell, Godfrey, Iles/May
• Review and Interviews with Community Organizations
• Police Recruitment Policies
• Police Complaints Process
• Benchmarking with Other Police Services
• Unfounded Occurrences

It is anticipated that a draft report will be issued in relation to this project by mid April 1999.

2.Chemical Pricing

A report on Chemical Pricing was submitted to the Audit Committee on December 1, 1998. As a result of issues raised in this report the Audit Committee requested further audit work be conducted on specific areas. This work is complete and a report will be forwarded to the Audit Committee on March 1, 1999.

3.Metropolis (Toronto Police Information System).

Our field work relating to the project is complete and included the following:

• a review of budget submissions related to the Metropolis project;
• review of detailed project listing supporting budget submissions;
• verifying to the degree possible the recorded costs and benefits of a selection of Metropolis projects;
• review the process for determining and quantifying project benefits identifying areas of concern, and
• review Metropolis related reports issued by Police Internal Audit and Program Review Standards Unit.

It is anticipated that a report will be submitted to the March meeting of the Police Services Board and will subsequently be forwarded to the Audit Committee.

4.Parking Authority Review

The primary focus of this audit was to obtain financial information to allow comparison of operating results between the former cities and the newly amalgamated Toronto Parking Authority. This report is complete and will be submitted to the March Audit Committee meeting.

5.Collision Reporting Centres Review

A report was requested by Council on the collision reporting centres' operations and their profit margins. In accordance with the request of Council, this report was submitted to the Emergency and Protective Services Committee meeting of January 12, 1999.

6.Sheppard Subway Budget Review

A report related to Budget overruns on the Sheppard Subway has been submitted to the Audit Committee. As a result of this report the Committee requested additional information. The collection of this information is ongoing and a report will likely be available for the May 1999 Audit Committee meeting. In our previous report to the Audit Committee we indicated that estimated budget overruns relating to the project were understated by $14.2 million. Based on our ongoing review of the project we continue to contend that these estimates are reasonable.

7.Review of Police Towing Contracts

This project is complete. Two in camera reports were issued to the Police Services Board as well as a public report. The public report included a number of recommendations relating to the administration of the towing contracts. These recommendations have been implemented.

8.Payroll Processing Controls

This project is in progress and will be submitted to the April Audit Committee. We have, however, forwarded a letter to the Chief Financial Officer and Treasurer outlining a number of concerns identified during this review.

9.Investments Review

This project is complete. A report will be issued to the March Audit Committee.

10.Cash Management Review

This review is ongoing. Issues identified during the course of the review have been communicated to senior finance staff on an ongoing basis.

11.Property Tax Review

This review is ongoing. It is anticipated that a report will be forwarded to the May Audit Committee meeting.

12.Parking Tags Revenue/Administration

This project is complete. A report will be issued to the March Audit Committee.

13.Parking Enforcement Review

Preliminary work has been conducted in connection with this project and certain observations and recommendations have been included in a management letter which was issued in camera to the Police Services Board. It is anticipated that a final report will be issued in September 1999.

14.Compliance with Expenditure Policies

This project is complete. A report will be issued to the March Audit Committee.

15.Financial Information System

Ongoing work is being conducted in relation to this project. Meetings with senior finance staff and external auditors are being conducted on a regular basis.

16.Year 2000 Review (Y2K)

Ongoing work is being conducted in relation to this project. Audit staff continue to participate in the project. A progress report will be issued to the March Audit Committee meeting.

17.Consolidation of Financial Information

This work is complete and the results have been forwarded to senior City Finance staff. This work involved a financial audit of the consolidation of the closing balances of each of the former cities. A number of significant adjusting accounting entries were identified and have been reported to senior staff of Finance. This information has also been forwarded to the City's external auditors. A formal report will not be prepared on this project.

18.Client Identification and Benefit System (CIBS)

The Audit Department is a member of the CIBS Security Team which is tasked with ensuring the assets of the City and the information assets acquired and/or maintained in the CIBS environment are properly and adequately safeguarded. This project is ongoing.

19.Review of Quality Assurance Function - Community Services

This work is in its preliminary stages and will likely be completed by September 1999.

20.Bylaw Enforcement

This work has not commenced at this time. It is likely to be completed by September 1999.

21.Contract Compliance

This work has not commenced at this time. It is likely to be completed by September 1999.

22.Vehicle Safety Compliance

The Department is awaiting the results of the Fleet Management Review in order to determine whether or not issues relating to vehicle safety are addressed in the review document.

23.Children's Services Project

This project is ongoing. One staff member is currently spending 100 percent of her time on this project.

24.External Audit Assistance

Regular meetings are taking place between the City Auditor and the external auditors. Specific responsibilities in regards to required financial audit work have been determined. The coordination of this work is being conducted by both internal audit and external audit staff.

25.Business Improvement Areas (BIA) Operational Review

This review will be conducted after the financial audits of the BIA's.

26.Financial Audits Relating to BIA's

This work is ongoing but to a great extent is dependant on financial information being available from the City Finance Department. The preparation of this information is currently behind schedule.

27.Financial Audits Relating to Community Centres

This work is ongoing but to a great extent is dependant on financial information being available from the City Finance Department. The preparation of this information is currently behind schedule.

28.Homes for the Aged Subsidies

The subsidy audits for the ten Homes for the Aged have been completed and have been filed with the Ministry.

29.Election Expense Compliance Audit

The audit has been completed and in accordance with the direction of Council, the City Auditor has appeared before a Justice of the Peace in regards to the laying of information to commence legal proceedings.

Additional Projects

In addition to projects identified by the City Auditor, additional audit work has been requested by both Council and Senior Management. Projects not included in the original Workplan were as follows:

• Corporate Variance Report
• 1999 Capital Budget - Toronto Police Services, Toronto Fire Services - Radio Communications System
• Cityhome Review - Maintenance and Purchasing Controls
• Amendment of the Existing Consulting Services Agreement Between the City and the Firm of R.V. Anderson Associates Limited for Engineering Services Related to the Implementation of a 100 Percent Biosolids Beneficial Use Program at the Main Treatment Plant
• Board of Health Subsidy Claim Audit
• Community and Neighbourhood Services - Review and Analysis of Financial Information in Support of Certain Grant Applications
• Review of Church Street Bingo Sponsors Association
• Review of Data Conversion, York Employees' Pension and Benefit Fund
• Review of Data Conversion, City of Toronto Pension Plans
• Police Services Board - Directly Operated Pound Business Case

Follow-up of Previous Reports

The Department has developed a tracking system in relation to recommendations made in its various reports. Follow-up reviews are routinely conducted six months after the issue of reports. A number of previously issued management letters now fall within that time frame and follow-up reviews are being conducted. These reviews are as follows:

Number of

Management LettersRecommendations

• 1997 Management Letters of the Former Municipalities

of Metropolitan Toronto, City of Toronto, City of Scarborough,

City of Etobicoke, City of York and Borough of East York 48

• Novell Network Computer System - Management Letter 28
• Board of Governors of Exhibition Place 26
• Social Services Division -

General Welfare Assistance Program - Management Letter 24

• Toronto Transit Commission 20
• Tourism Toronto - Management Letter 10
• Hostel Services Division - Management Letter 9
• Hummingbird Centre for the Performing Arts - Management Letter 7
• Homes for the Aged 7
• Former Metropolitan Toronto Library Board - Management Letter 6
• Toronto Hydro - Management Letter 3
• The Parking Authority of Toronto - Management Letter 2

Results of these follow-up reviews will be forwarded to the Audit Committee.

Conclusions:

Audit projects identified by the Department and approved by the Audit Committee are, for the most part, on schedule. Delays on certain projects are as a result of specific additional requests by Council and Senior Management. The Department does however have concerns relating to the timely preparation of financial statements and audit working papers of the Business Improvement Areas and Community Centres. The audit of each of these entities cannot be completed until this information is provided. The City Auditor has met with the Treasurer and Chief Financial Officer to discuss and address this particular issue. It is our understanding that additional resources have been allocated to this particular project.

Contact Name and Telephone Number:

Jeffrey Griffiths, 392-8461

Jeffrey Griffiths

City Auditor